Private Prisons Will Get Totally Slammed By Immigration Reform

As the Senate and the White House turn their focus to
comprehensive immigration reform, little attention has been given
to who would be negatively impacted by any move to fix the
country's broken immigration system and provide a path to
citizenship for the estimated 11 million illegal immigrants
living in the United States.

Perhaps no one has a bigger
interest in maintaining the status quo than private prisons, a
billion dollar industry built largely on contracts with federal
agencies, including Immigrations and Customs Enforcement
(ICE).

Over the past decade, revenues for the industry giants —
Corrections Corporation of America and The GEO Group
— have skyrocketed, thanks in large part to a federal
program introduced under President George W. Bush in 2005 dubbed
Operation Streamline, which brought federal
criminal charges against people who cross the border
illegally.

“[Prior to 2005,] typically when someone was apprehended at the
border they would be deported or dealt with in the civil
immigration system," Bob Libal, executive director of Grassroots
Leadership, told Business Insider. "What Streamline did was
move those people into the criminal justice system and charged
them with one of two crimes."

On first illegal entry, immigrants are now prosecuted for a
misdemeanor punishable by up to six months in federal prison.
If an individual tries to cross again, it is considered a felony,
punishable by up to 20 years. The zero-tolerance
policy is a fast-track to put non-violent offenders into
U.S. prisons, with criminal casesoften resolvedin only two days.

The
program is part of the Department of Homeland Security's enormous
$18 billion immigration enforcement budget — more than
what's spent by the FBI, Drug Enforcement Administration, Secret
Service, U.S. Marshals, and the Bureau of Alcohol, Tobacco,
Firearms and Explosives combined.

The result has
been a 49 percent increase in detainee population since
2005, and 107 percent increase in the price
private prisons charge for government contracts since
2004.

In 2011,
GEO Group and CCA reported combined revenues over $3
billion, with $1.3 billion coming from federal sources — a 137
percent increase from 2004. (A third major private
prison company, Management and Training, does not publicly
disclose its earnings.)

GEO Group's CEO George Zoley spells out the connection clearly in
his 2011 letter to shareholders:

"At the federal level, initiatives related to border enforcement
and immigration detention with an emphasis on criminal alien
populations as well as the consolidation of existing detainee
populations have continued to create demand for larger-scale,
cost efficient facilities."

Understandably, these companies see immigration reform as a
serious threat to profits.

"For instance, any changes with
respect to drugs and controlled substances or illegal immigration
could affect the number of persons arrested, convicted, and
sentenced, thereby potentially reducing demand for correctional
facilities to house them," CCA wrote in its 2011report to shareholders.

And from
a 2011 GEO filing with the SEC:
"Immigration reform laws
which are currently a focus for legislators and politicians at
the federal, state and local level also could materially
adversely impact us."

A spokesperson for CCA insisted that they are not trying to
influence immigration policy to increase profits.

"The cited language from a past annual report represents
standard disclosure language to help investors — many of whom may
not be familiar with corrections and detention processes — make
informed investment decisions," said company spokesman Steve Owen
in an email. "Under longstanding corporate policy, CCA does not
draft, lobby for or in any way promote crime, sentencing or
detention enforcement legislation. The primary focus of our
federal lobbying efforts is education on the merits and benefits
of public-private partnership in corrections generally, and the
relevant services CCA provides."